DBRS Morningstar Assigns Rating of A high (sf), Stable Trend, to Capital Relief East Side 11th and 28th Ground Lease Loan

DBRS, Inc. (DBRS Morningstar) assigned a rating of A high (sf) with a Stable trend to the Capital Relief East Side 11th and 28th Ground Lease Loan due December 1, 2041 (the Mortgage Loan), made to East Side 11th and 28th LLC.

The Mortgage Loan is secured by 66,679 square feet of land subject to a ground lease on two adjoining parcels at 282 Eleventh Avenue and 525 West 28th Street, New York, NY located in the Chelsea submarket of Manhattan adjacent to the High Line elevated park and one block south of Hudson Yards multi-use office/retail/residential/hotel development. The improvements, not part of the collateral, consist of two conjoined Class A multifamily buildings forming an “L” shape constructed in 2014 with a total of 710 units and 144 parking spaces.

The A high (sf) rating reflects (1) the expected stability of debt payments; (2) a low loan-to-value ratio; (3) the property’s location in a well-established New York residential submarket; and (4) the ground rent structure which places the ground rent mortgage in an attractive position in the capital stack.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American Single-Asset/Single-Borrower Ratings Methodology (February 28, 2022), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

This rating was initiated at the request of the Lender.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This rating was disclosed to the John Hancock Life Insurance Company.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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